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Show TheSalt Lake Tribune BUSINESS Sunday, Next-Century Strategy Driving Megamergers By Ronald E. Yates CHICAGO TRIBUNE Atfirst glance, the age-old pursuit of big, bigger and biggest ap- pears to be what's driving the most furious round of corporate megadeals in U.S. history. Buta desire to be biggest is not the only reason corporate dealmeisters are hammering together such blockbuster mergers as last month’s $19 billion Wait DisneyCapital Cities/ABC Inc. alliance or last week’s $10 billion linkup between Chase Manhattan Corp. and Chemical Banking Co. The samecan be said for June's $3.52 billion marriage between IBM Corp. and Lotus Develop- ‘Journalists Can Learn From Legacy Modern journalism has a “whiz-bang”aura with laptops, restructured newsrooms and on-line delivery systems. But ~ today’s new-age journalists can learn valuable lessons from two old-style practitioners wholeft ~our ranks recently. ‘Wendell J. Ashton and Douglas L. Parker were contempo* raries in the Salt Lake journalIstie scene — Wendell was - publisher of the Deseret News “when Dougwas political editor for The Salt Lake Tribune. ~. I'm not sure they ever met, but they would have enjoyed sharing journalistic “war stories.” I had the good fortune to work with both; Wendell as my mentCorp., January's $14 billion tieup of pharmaceutical giants Glaxo PLC and Welicome PLC and possible $8.5 billion deal between Time Warner Inc. and Turner Broadcasting System Inc. Sure, in each case the corporations created are amongthe largest in their industries. But the reasons for merging go far beyond an ego-driven desire to be the biggest kid on the block. The real reasons behind what analysts say will be the biggest yearfor mergers and acquisitions in American history can be summed upin two words: strategy and synergy. “These companies are positioning themselves for the next centu- boss at the News and Doug as a tival when we covered the Legislature in the 1970s. » They had radically different styles -- Wendell’s back-slapping exuberance vs. Doug's reserved demeanor. But both had a@-love for journalism that - showed in their work. Wendell Ashton earned an limmense reputation in other venues: advertising, public re- ry,” said Richard Peterson, of Se- eurities Data Co., a leading provider of merger and acquisition information. “There are new rent spate of corporate tieups with a historic high of some 219 bank deals worth $35 billion through last week, alliances are not being driven by ego, but by the need to compete with companies like General Motors Corp., AT&T and Charles Schwab. In an era of deregulation, those companies are luring customers away from banks by offeringbet- Sep 10, 1995 1993 from 40 percentin 1973, ac- FS Board. Thatfact is a key reason for the Chemical Banking Co.-Chase in order to continue to grow and gain market share, they have to acquire other banks,” said Mer. gerstat’s Shephard. “‘Consolidation and the search for synergy is Manhattan Corp. hookup and for drivingit.” cording to the Federal Reserve two other recent deals: the $5.4 billion merger of First Union First Fidelity in June and the $5.3 billion alliance between First Chicago Corp. and NBD Bancorp Inc. in July. “Larger banks are finding that “Mostof these are content and distribution-system mergers,” said Kichler. “That is something that has popular appeal now. Me- dia and entertainment people want to own both content and distribution of their product.” Strategy and synergy interests also are behind the mergers taking place in the media and entertainment industry, says Tom Kichler, partner and director of Midwest corporate finance for Ernst & Young. That's why you see Disney mar- rying up with Capital Cities/ABC and why Time Warner is talking to Ted Turner about acquiring Turner Broadcasting, adds Kichier. ter deals on an array oftradition- al bank products such as auto loans, checking accounts, credit cards and investments. There are other reasons, too, not the least of which is the decline of American banks in both domestic and international markets. In the United States, the bankingindustry's share of financial assets fell to 25 percent in The OLDE Premium Pins Money Market Series has had one of the highest yields of any money market fund. 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Andthey need to be ready to access andservetliem.” According to Peterson, U.S. mergeractivity is running at an unprecedented rate of $1.1 billion per day andis on a pace to exceed lations, fund-raising, communi- ty leadership. But he always considered himself a journalist. He loved to recall his sports+yriting days at the old Tele= gram. Wendell’s legendary dertermination could be ~ exasperating. You'd think you had him talked out of some“thing, and he'd launcha new efTort the next day. But his heart was always in the right place, totally committed to helping his newspaper and his community achieve excellence. That determination, along with his integrity, thoroughness and vision, provides a legson for journalists. Hehadstrong personalinteg- $400 billion — far beyondthe record $347billion of last year and the previous record of $335 billion in 1988. Add to that the fundamental shifts taking place in such industries as banking andfinancialser- aNCA WOUuT! vices; media and entertainment; pharmaceuticals and biotechnolcgy; and computers and software and youcan see why companies in those industries are eager to ac- oe Vision and rarBNaeB WTCRSST ig quire or merge with companies that offer complementary skills ora strategic advantagein related markets. ee Egghead and we'll hand you $1,000 worth of mail-in and instant rebates! (While supplies last.) PENTIUM 90Mhz COMPLETE SCHOOL COMPUTER $1295, PENTIUM 90 UPGRADES i2X CD Rom Kit, 14 CD's , B (Reg. $4: 9.98) B Win #189712Dx (CD) Win #189696Dx (35°) Mi “Gel Masaic:in @ Box FREE. eRun DRGCRUy ae CLES DELOa} Lue Buy Windows 95 at RSMie ae0D dustry, which Securities Data Co. saysis leading the way in the cur- rity. He could have received i Savings Pack $35 gs aE gece i SRS Seen CONTalten a s Original ETE ea) For example, in the banking in- complimentary tickets to athJetic and arts events, but he paid his way from his own pocket, not from Deseret News coffers. Any tickets the newspaper bought werefor thestaff. + Like most community-inolved publishers, his outside sparta’sometimesraised con: est for z =the newspaper. But to Wengell’s credit, he believed in a “hands-off” policy when news t tinvolved him. When the symphony was embroiled ii n contro- etee e's[at Printer ‘ CUE VISA Card The more you buy, the more you save! For a limited time, get a $20 eit eimaint Ee BEUPCR AMntimei ite CUEpon with your hity:/Auww.egghead. vite approved credit card. (Details in store.) z Metal Roof. Leak Répair. Systems & Per er cs © Trailers/RVs * the city benefited from having tivo strong newspapers. He had feclear vision about what the ® Gutters +Déseret News needed to do to - Temain viable, and the newspaper would bebetter off hadcircumstances allowed implementation of his plans. Doug Parker, Zhe Tribune’s Political editor for 25 years, was the exact opposite of the e —Also Asphalt Roof Repair— I stereotypical journalist. He was DeAnn Evans, a former an assistant professor in the University of Utah Department _of Communications. 73 (Reg. $204.98) CUE Win #1704640x HonVieo Bee STUNG CA:BTU UeNSia Ritaa) mere quiet, sensitive, reflective, not newspaper managing editor, is 5 for 95 “High Performance|Industrial Product flashy or ostentatious. He got the job done — and done well — without making a big deal. WhenI first covered legislative meetings for the Deseret News, I'd glance up from frantic-note-taking to see Doug recording very few notes. Occasionally, he'd retrieve a small notebook from his pocket and jot down a few words. I'd be gleefui that my thorough notetaking wouldtranslateinto a superior story. But when I'd read The Trib, i'd be dismayed to see ~ that Doug gotitall. As I observed him more, I realized Doug took fewer notes because he listened and understood better than most reporters.I tried to emulate him from then on and came to regard him as a friend whose droil observations could get me through even the dullest meeting. He was the consummate professional who wasn’t overly impressed withpoliticians he covfred or his power as political editor of the state's largest Pewapaner. “Contemporary newspapers , are different from the journal‘istic world that Doug Parker ahd Wendell Ashton knew. But *the journalistic legacy they left is timeless. 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